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INSURANCE REFUND

Pro Rata Insurance Refund Calculator

Canceling a policy early? Calculate the refund for the unused part of your premium — and see the exact day count behind it, so you can check the figure your insurer gives you. (For a policyholder-initiated cancellation with a penalty, use the short-rate calculator instead.)

Estimate a pro rata refund Enter your policy dates to see the refund and the steps.

Start from a common case:
$
Day-count basis and endpoint counting

Day-count basis

— why your number might differ

Counts the real number of days in both the period and the part you used. Leap years count Feb 29 automatically.

Most insurers count the cancellation day as already used — choose Exclusive to leave it out of the unused days.

Count both the first and last day?
Estimated refund
—
Enter your policy dates to see the refund and the steps.

Insurers often call this the unearned premium or return premium — it's the part of your payment for cover you won't use.

Calculation method See the exact formula with your numbers

    The steps fill in with your own numbers as soon as you enter your policy dates. Figures shown are illustrative.

    Plain language

    Refund, or applied to your balance?

    A pro rata refund returns the share of your premium for the cover you won't use. Some insurers send it back to you; others apply it to an outstanding balance instead — check your policy documents for which. The number itself is the same either way.

    ▲ Why 360, 365 or 366 days changes the answer

    The denominator — how many days the year is treated as having — moves the figure. A real calendar year is 365 days (366 in a leap year, when the policy spans Feb 29). Some insurers use a fixed 365, others a 360-day banking basis. If your refund doesn't match, switch the day-count basis above and compare the steps.

    How it's calculated

    Strictly proportional to the time left

    Refund = (total premium ÷ total days in the term) × unused days

    The unused days are counted from your cancellation date to the policy end date. This is a pro rata refund — strictly proportional to the time left, with no early-cancellation penalty. If your insurer is applying a penalty, that's a short-rate cancellation — use that calculator for the side-by-side.

    A worked example

    Say you paid $1,200 for a 12-month policy and cancel exactly halfway through, with 183 unused days left on an Actual/365 basis. The per-day premium is $1,200 ÷ 365 ≈ $3.29, so the unused portion is $3.29 × 183 ≈ $601. Switch the basis to a 360-day year and the per-day figure rises to about $3.33, nudging the refund to roughly $610 — the same dates, a different convention, a few dollars apart. That small gap is exactly why the calculator shows the day count it used: when your refund lands a little off, you can see whether it's the day-count basis, a rounding rule, or an actual short-rate penalty, instead of guessing or assuming the insurer made a mistake.

    Questions

    Frequently asked

    What is a pro rata insurance refund?
    It's the part of your premium returned for the unused time on a cancelled policy, calculated strictly in proportion to the days left — with no penalty.
    Why doesn't my refund exactly match what the insurer quoted?
    Insurers count days differently — Actual/365 vs a 360-day basis, or 366 across a leap year — and rounding or a short-rate penalty also shifts it. Switch the day-count basis above to find the one that reproduces their figure; your policy is the final word.
    How long does an insurance refund take after I cancel?
    Often around 10–30 days, depending on the insurer, your state, and the refund method. If it runs late, your state Department of Insurance is the place to escalate — check your policy for the exact window.
    Will I still get money back if I paid the whole year upfront?
    Usually yes — prepaying and then cancelling mid-term typically refunds the unused portion, minus any fee or short-rate penalty. Enter your premium and dates above to see the day-by-day math.
    Is an insurance refund taxable?
    A premium refund is generally not taxable income in the US — it is your own money coming back — though exceptions exist (for example premiums you deducted as a business expense). This runs in your browser and cannot see your taxes; confirm anything specific with a professional.

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